Special Issue "Mathematical Modeling of Socio-Economic Systems"

A special issue of Mathematics (ISSN 2227-7390). This special issue belongs to the section "Financial Mathematics".

Deadline for manuscript submissions: closed (31 August 2020).

Special Issue Editor

Prof. Leone Leonida
Website
Guest Editor
King's Business School, King's College London, London WC2R 2LS, United Kingdom
Interests: Finance; Financial Analysis; Innovation; Corporate Finance

Special Issue Information

Dear Colleagues,

This Special Issue aims at presenting a critical analysis and a survey of the research activity and perspectives coming from the actual and potential interactions between hard sciences, such as mathematics and physics, and socio-economic sciences. We will present scientific articles focusing on specific issues related to the modeling of socio-economic systems, with the goal of pushing forward further developments towards the general mathematical structures that are able to capture the complexity features of living systems in general, and of socio-economical systems in particular, as well as sounding applications using advanced tools of computer science.

We aim to offer a critical overview of a variety of mathematical approaches, namely, population dynamics, population dynamics with internal structure, game theory, evolutive games, mean field games, statistical dynamics, kinetic theory, and discussing the advantages and withdraws of the different methodological approaches and tools.

Prof. Leone Leonida
Guest Editor

Manuscript Submission Information

Manuscripts should be submitted online at www.mdpi.com by registering and logging in to this website. Once you are registered, click here to go to the submission form. Manuscripts can be submitted until the deadline. All papers will be peer-reviewed. Accepted papers will be published continuously in the journal (as soon as accepted) and will be listed together on the special issue website. Research articles, review articles as well as short communications are invited. For planned papers, a title and short abstract (about 100 words) can be sent to the Editorial Office for announcement on this website.

Submitted manuscripts should not have been published previously, nor be under consideration for publication elsewhere (except conference proceedings papers). All manuscripts are thoroughly refereed through a single-blind peer-review process. A guide for authors and other relevant information for submission of manuscripts is available on the Instructions for Authors page. Mathematics is an international peer-reviewed open access semimonthly journal published by MDPI.

Please visit the Instructions for Authors page before submitting a manuscript. The Article Processing Charge (APC) for publication in this open access journal is 1600 CHF (Swiss Francs). Submitted papers should be well formatted and use good English. Authors may use MDPI's English editing service prior to publication or during author revisions.

Published Papers (11 papers)

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Research

Open AccessArticle
European Countries Ranking and Clustering Solution by Children’s Physical Activity and Human Development Index Using Entropy-Based Methods
Mathematics 2020, 8(10), 1705; https://doi.org/10.3390/math8101705 - 03 Oct 2020
Viewed by 442
Abstract
The aim of the present study is to propose a new approach for evaluating and comparing European countries using indicators of the children physical activity and the human development index. The Global Matrix 3.0 on physical activity for children and youth and human [...] Read more.
The aim of the present study is to propose a new approach for evaluating and comparing European countries using indicators of the children physical activity and the human development index. The Global Matrix 3.0 on physical activity for children and youth and human development index data on the 18 European countries were used. MADM (multi-attribute decision making) approach was applied for this task. The criteria weights calculated by applying the weight balancing method—weight balancing indicator ranks accordance (WEBIRA). New methodology of interval entropy is proposed for determining the priority of criteria separately in each group. The novel approach of α-cuts for recursive procedure of ranking the alternatives was used. For comparison, three alternative entropy-based methods—entropy method for determining the criterion weight (EMDCW), method of criteria impact LOSs and determination of objective weights (CILOS) and integrated determination of objective criteria weights (IDOCRIW) were applied to address this MADM problem. Cluster analysis of European countries carried out using results obtained by all above methods. Comparison of the MADM methods revealed that three alternative methods assigned negligible values to whole group of criteria. Meanwhile, WEBIRA family methods performed the ranking of European countries according to the interrelation of the two groups of criteria in a balanced way. Thus, when addressing MADM tasks with two or more naturally related sets of criteria, it is appropriate to apply criteria adapted for that purpose, such as WEBIRA. Full article
(This article belongs to the Special Issue Mathematical Modeling of Socio-Economic Systems)
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Open AccessArticle
The Theory of Cognitive-Conditional Conservatism in Accounting
Mathematics 2020, 8(9), 1552; https://doi.org/10.3390/math8091552 - 10 Sep 2020
Viewed by 373
Abstract
Literature from multiple fields in psychology and economics have identified that impulsive individuals are more prone to riskier behavior and are less conservative. Accounting literature has studied conservatism for many years, and demonstrated that there are two roots of conservatism, one unconditional and [...] Read more.
Literature from multiple fields in psychology and economics have identified that impulsive individuals are more prone to riskier behavior and are less conservative. Accounting literature has studied conservatism for many years, and demonstrated that there are two roots of conservatism, one unconditional and another conditional to news available at decision-making. However, there is no bridge linking both. Using an analytical model, we show that the conservatism level of an accountant is lower for impulsive individuals because of their reduced focus on future consequences of their decisions, which is coupled with an increased focus on present consequences. Hence, we put forward a theory of “cognitive-conditional conservatism”, that is, a third root of conservatism. Additionally, we also prove the asymmetry property of this behavior. Full article
(This article belongs to the Special Issue Mathematical Modeling of Socio-Economic Systems)
Open AccessArticle
Application of the Kernel Density Function for the Analysis of Regional Growth and Convergence in the Service Sector through Productivity
Mathematics 2020, 8(8), 1234; https://doi.org/10.3390/math8081234 - 27 Jul 2020
Viewed by 505
Abstract
The aim of this research work is to analyze growth and convergence processes in the service sector and its large groups, market, and non-market services, at the regional level in Ecuador by taking the labor productivity variable as a reference. The methodology used [...] Read more.
The aim of this research work is to analyze growth and convergence processes in the service sector and its large groups, market, and non-market services, at the regional level in Ecuador by taking the labor productivity variable as a reference. The methodology used is an analysis of distributive dynamics of the data, applying the non-parametric method of Kernel density functions from a mathematical economics approach. The results obtained show that the service sector has non-alarming levels of inequality, its trend over time is increasing. When disaggregating the data, it was observed that non-market services show a rapid growth in inequality. In contrast, market services show greater stability during the period analyzed. Regarding intra-distribution dynamics for the service sector and its subsectors, in the long term, poor regions improve, while rich regions deteriorate. However, deterioration of advanced regions is less intense in non-market services. Full article
(This article belongs to the Special Issue Mathematical Modeling of Socio-Economic Systems)
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Open AccessArticle
Considering Random Factors in Modeling Complex Microeconomic Systems
Mathematics 2020, 8(8), 1206; https://doi.org/10.3390/math8081206 - 22 Jul 2020
Cited by 1 | Viewed by 711
Abstract
Within the framework of a model describing real-functioning association of three enterprises, numerical calculations of economic dynamics parameters considering fluctuating market demand for the goods were performed. A methodology was suggested for approximated consideration of both seasonal and random demand fluctuations at the [...] Read more.
Within the framework of a model describing real-functioning association of three enterprises, numerical calculations of economic dynamics parameters considering fluctuating market demand for the goods were performed. A methodology was suggested for approximated consideration of both seasonal and random demand fluctuations at the market of textile garments; the main steps of the suggested methodology were described. The main exogenous random factors within this model include, as stated above, the volume of market demand for the goods produced by the enterprises of the group. The basic volume of market demand is considered at the average actual level according to the results of the enterprises’ analysis, and additionally we take into account the influence of non-price factors, such as random changes in the consumers’ tastes, consumers’ income, and other random factors on the market demand. By volume of market demand, we consider the total amount of goods produced by the enterprises of the group that all consumers are willing and able to purchase at a specific price in a marketplace. The calculations were made based on actual values of external economic parameters, such as labor cost, product prices, etc. Influence of the market demand fluctuations on the companies’ activity has been illustrated both numerically and graphically, allowing the analysis of the impact of exogenous parameters on the companies output and profits. The suggested approach creates a basis for further analysis of the impact of random factors of a similar nature, i.e., stochastic shocks related to the level of interest rates, shifts and turnabouts in the social environment, as well as the market transformations due to annual/seasonal epidemics. Full article
(This article belongs to the Special Issue Mathematical Modeling of Socio-Economic Systems)
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Open AccessArticle
Can Citizens Affect the Performance of Their Elected Representatives? A Principal–Agent Model of Strategic Interaction in Democratic Systems
Mathematics 2020, 8(7), 1194; https://doi.org/10.3390/math8071194 - 21 Jul 2020
Viewed by 374
Abstract
According to standard economic theory, human beings are expected to work more and better when benefits in the form of lower costs or higher reward increase. Principal–agent theory applied to the theory of the firm relies on this relationship and states that employees [...] Read more.
According to standard economic theory, human beings are expected to work more and better when benefits in the form of lower costs or higher reward increase. Principal–agent theory applied to the theory of the firm relies on this relationship and states that employees should be paid according to how well they perform their tasks. In this framework, monitoring devices are introduced to control employees’ performance and determine salaries. In this paper we construct a principal–agent model to describe the relationship between citizens/voters and elected representatives in which monitoring devices are introduced to control the performance of the latter. We demonstrate that tighter controls may produce better performance but also may produce a reduction in the intrinsic motivations of elected representatives, resulting in a reduction of their work effort. These results are interpreted in the light of the motivation crowding theory. Full article
(This article belongs to the Special Issue Mathematical Modeling of Socio-Economic Systems)
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Open AccessArticle
A Two-Regime Markov-Switching GARCH Active Trading Algorithm for Coffee, Cocoa, and Sugar Futures
Mathematics 2020, 8(6), 1001; https://doi.org/10.3390/math8061001 - 18 Jun 2020
Cited by 2 | Viewed by 528
Abstract
In the present paper we tested the use of Markov-switching Generalized AutoRegressive Conditional Heteroscedasticity (MS-GARCH) models and their not generalized (MS-ARCH) version. This, for active trading decisions in the coffee, cocoa, and sugar future markets. With weekly data from 7 January 2000 to [...] Read more.
In the present paper we tested the use of Markov-switching Generalized AutoRegressive Conditional Heteroscedasticity (MS-GARCH) models and their not generalized (MS-ARCH) version. This, for active trading decisions in the coffee, cocoa, and sugar future markets. With weekly data from 7 January 2000 to 3 April 2020, we simulated the performance that a futures’ trader would have had, had she used the next trading algorithm: To invest in the security if the probability of being in a distress regime is less or equal to 50% or to invest in the U.S. three-month Treasury bill otherwise. Our results suggest that the use of t-student Markov Switching Component ARCH Model (MS-ARCH) models is appropriate for active trading in the cocoa futures and the Gaussian MS-GARCH is appropriate for sugar. For the specific case of the coffee market, we did not find evidence in favor of the use of MS-GARCH models. This is so by the fact that the trading algorithm led to inaccurate trading signs. Our results are of potential use for futures’ position traders or portfolio managers who want a quantitative trading algorithm for active trading in these commodity futures. Full article
(This article belongs to the Special Issue Mathematical Modeling of Socio-Economic Systems)
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Open AccessArticle
Parameter Estimation and Measurement of Social Inequality in a Kinetic Model for Wealth Distribution
Mathematics 2020, 8(5), 786; https://doi.org/10.3390/math8050786 - 13 May 2020
Cited by 1 | Viewed by 437
Abstract
This paper deals with the modeling of wealth distribution considering a society with non-constant population and non-conservative wealth trades. The modeling approach is based on the kinetic theory of active particles, where individuals are distinguished by a scalar variable (the activity) which expresses [...] Read more.
This paper deals with the modeling of wealth distribution considering a society with non-constant population and non-conservative wealth trades. The modeling approach is based on the kinetic theory of active particles, where individuals are distinguished by a scalar variable (the activity) which expresses their social state. A qualitative analysis of the model focusing on asymptotic behaviors and measurement of inequality through the Gini coefficient is presented. Finally, some specific case-studies are proposed in order to carry out numerical experiments to validate our model, characterize societies and investigate emerging behaviors. Full article
(This article belongs to the Special Issue Mathematical Modeling of Socio-Economic Systems)
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Open AccessArticle
Dominance-Based Decision Rules for Pension Fund Selection under Different Distributional Assumptions
Mathematics 2020, 8(5), 719; https://doi.org/10.3390/math8050719 - 04 May 2020
Viewed by 553
Abstract
The pension landscape is changing due to the market situation, and technological change has enabled financial innovations. Pension savers usually seek financial advice to make a personalised decision in selecting the right pension fund for them. As such, decision rules based on the [...] Read more.
The pension landscape is changing due to the market situation, and technological change has enabled financial innovations. Pension savers usually seek financial advice to make a personalised decision in selecting the right pension fund for them. As such, decision rules based on the assumed risk profile of the decision maker could be generated by making use of stochastic dominance (SD). In the paper, the second-pillar pension funds operating in Lithuania and Slovakia are analysed according to SD rules. The importance of the distributional assumption is explored while comparing the results of empirical, student-t, Hyperbolic and Normal Inverse Gaussian distributions to generate SD-based rules that could be integrated into an advisory solution. Moreover, due to the differences in SD results under different distributional assumptions, a new SD ratio is proposed that condenses the dominance-based relations for all considered dominance orders and probability distributions. The empirical results indicate that this new SD ratio efficiently characterises not only the preference of each fund individually but also of a group of funds with the same attributes, thus enabling multi-risk and multi-country comparisons. Full article
(This article belongs to the Special Issue Mathematical Modeling of Socio-Economic Systems)
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Open AccessArticle
Modeling Asymmetric Interactions in Economy
Mathematics 2020, 8(4), 523; https://doi.org/10.3390/math8040523 - 03 Apr 2020
Cited by 3 | Viewed by 439
Abstract
We consider a general nonlinear kinetic type equation that can describe the time evolution of a variable related to an economical state of an individual agent of the system. We assume asymmetric interactions between the agents. We show that in a corresponding limit, [...] Read more.
We consider a general nonlinear kinetic type equation that can describe the time evolution of a variable related to an economical state of an individual agent of the system. We assume asymmetric interactions between the agents. We show that in a corresponding limit, it is asymptotically equivalent to a nonlinear inviscid Burgers type equation. Full article
(This article belongs to the Special Issue Mathematical Modeling of Socio-Economic Systems)
Open AccessArticle
Modelling the Relation between Managers, Shadow Cost of External Finance and Corporate Investment
Mathematics 2019, 7(11), 1050; https://doi.org/10.3390/math7111050 - 04 Nov 2019
Viewed by 589
Abstract
This paper provides a theoretical framework for studying the impact of self-interested managers on the level of corporate investment. I extend the standard neoclassical model of firm value maximization to incorporate the effect of misaligned managers on corporate investment via a firm’s profit, [...] Read more.
This paper provides a theoretical framework for studying the impact of self-interested managers on the level of corporate investment. I extend the standard neoclassical model of firm value maximization to incorporate the effect of misaligned managers on corporate investment via a firm’s profit, adjustment costs of capital and shadow cost of external finance. Under some assumptions, commonly made by the relevant literature, the model shows that the intensity of agency conflicts between misaligned managers and outside shareholders affects a firm’s investment decisions generating either under or overinvestment with respect to a perfect capital market and driving a higher cost of external finance. Full article
(This article belongs to the Special Issue Mathematical Modeling of Socio-Economic Systems)
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Open AccessArticle
Bureaucratic Reshuffling and Efficiency: Do n-Competing Bureaus Determine Inefficient Results?
Mathematics 2019, 7(10), 998; https://doi.org/10.3390/math7100998 - 21 Oct 2019
Viewed by 543
Abstract
Governments often support their preferences for decentralised (centralised) bureaucracies on the grounds of efficiency considerations (production side). Here, we consider the demand side, i.e., whether the government perception of citizens’ demand for differentiated goods/services might increase efficiency by simply reshuffling bureaucratic production activities. [...] Read more.
Governments often support their preferences for decentralised (centralised) bureaucracies on the grounds of efficiency considerations (production side). Here, we consider the demand side, i.e., whether the government perception of citizens’ demand for differentiated goods/services might increase efficiency by simply reshuffling bureaucratic production activities. We represent the budgetary process—between an incumbent governing party and n-competing bureaus producing differentiated goods/services—as a simultaneous Nash-compliance game with complete information. On these grounds, we analyse—in terms of public production, players’ rents and payoffs—the effects of increasing competition (as for the number of bureaus) in the political–bureaucratic market. Moreover, we evaluate, ceteris paribus, the effects of bureaucratic reshuffling from the point of view of society, assumed to prefer those policies that approximate social efficiency by minimising bureaucratic and political rents. Full article
(This article belongs to the Special Issue Mathematical Modeling of Socio-Economic Systems)
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